Yahoo and Nokia in mobile web deal

By Joseph Menn in San Francisco and Andrew Ward in Helsinki

Yahoo and Nokia, two companies under pressure from increasingly forceful competitors Google and Apple, have struck a broad alliance to strengthen their mobile internet offerings, particularly in emerging markets.

In a separate deal due to be announced on Monday night, Yahoo is acquiring an Indonesian social-networking site that works on a wide range of mobile phones. The target, Koprol, an early-stage Jakarta company, only began accepting users late last year.

IN Technology

Both steps continue Yahoo’s efforts to invest in emerging economies where internet penetration still lags and tens of millions of people access the internet only from mobile phones, so the company can spend little and still have a major brand recognition as web use expands.

In the arrangement with Nokia, Yahoo will provide its e-mail and instant messaging services on all Nokia handsets, which remain the most popular smartphones worldwide. Nokia will supply its mapping services to help Yahoo fight against Google
. A large proportion of Nokia’s 9m Ovi software users are in such markets, including China and India.

Yahoo wants to make inroads in such countries so that when more advanced devices, speedier connections and penetration rates rise, it will be seen as the brand most synonymous with the web.

For Nokia, the most appealing part of the partnership is access to content that will buttress its application store and other services, where it badly lags Apple’s iPhone and devices running Google’s Android operating system. Both of those offer more functionality than Nokia’s feature phones and boast thriving ecosystems.

Mapping has been one of Nokia’s strongest assets since its acquisition of Navteq, an electronic map company, for $8.1bn in 2007. But the Finnish group has struggled to profit fully from its expertise amid tough competition from Google.

However, analysts said the deal would fail to provide much of a boost to either company in the lucrative US and European markets.

“It feels like two brands that have both lost a lot of relevance in the markets that are coming together to try to make something meaningful,” said Michael Gartenberg, an industry analyst with Altimeter. “It makes sense, but the question for both is: does it matter?”

Nokia officials said the deal was aimed in part at developed markets, where critics say the group has struggled to adapt.

In buying Koprol, Yahoo is acquiring an Indonesian social-networking site that works on a wide range of mobile phones. The Silicon Valley-based internet concern did not disclose terms of the deal, but in January Koprol boasted of a then-record daily number of sign-ups requests, about 3,800.

Koprol has some functions similar to FourSquare, where users “check in” and announce that they are visiting a given location. It is also like Yelp in that it circulates reviews and rankings of restaurants and other businesses.

The main difference is that Koprol is geared toward phones, including those with only basic internet access. Even without GPS functionality, the free service connects people based on their location.

In its drive into emerging markets, Yahoo in August bought Maktoob, the most popular Arabic-language Web portal with more than 16m monthly users, and executives said they expect the march to continue.

“This [the Koprol purchase] is a continued investment in that territory,” said Yahoo senior vice-president David Ko.

The world’s fourth most populous country with 230m residents, Indonesia now has 165m mobile phone users, up from half that figure three years ago. Just 30m people used the internet in 2009, according to United Nations figures.

Yahoo executives said they intended to invest more in Koprol to widen its reach within Indonesia and bring the offerings to other countries.

• Tony Blair, former British prime minister, has joined Khosla Ventures, a prominent Silicon Valley venture capital firm, as a senior adviser. His company, Tony Blair Associates, will use its resources and extensive relationships to help the agendas of Khosla’s portfolio of clean technology companies.

Vinod Khosla, co-founder of Sun Microsystems, is among the most active investors in the clean energy sector.

“Solving the climate crisis is more than just a political agenda item – it’s an urgent priority that requires innovation, creativity, and ambition,” said Tony Blair. “I share a clear vision with Vinod, one of the earliest leaders in cleantech investment, that entrepreneurs in Silicon Valley and beyond will have a tremendous impact on our environmental future.”

The relationship marks yet another piece of a growing empire of companies and charitable interests overseen by the former statesman.

Mr Khosla said: “With Tony’s advice and influence, we will create opportunities for entrepreneurs and innovators to devise practical solutions that can solve today’s most pressing crisis at a global scale while creating new jobs, new businesses and new sources of sustainable growth.”